Monitronics International Announces Results for Second Fiscal Quarter

Company reports net loss for quarter, sees rise in attrition rate, but says long-term outlook is still promising


Monitronics International, a leading security alarm monitoring provider, has announced its financial results for the quarter ending Dec. 31, 2004.

In the three months ending on Dec. 31, the company's second fiscal quarter, Monitronics saw revenues increase by $4 million to $41.5 million for that second quarter over the same quarter in 2003, when revenues were at $37.5 million. The $4 million increase over the previous year's quarter corresponds to an 11 percent increase.

Monitronics also reported earnings before interest, taxes, depreciation and amortization of $29.3 million, which is an increase of 9 percent over the $26.9 million for the second fiscal quarter of 2003.

However, the increases didn't translate to net gains. In the same quarter of 2003, Monitronics saw a net loss of $100,000; in this quarter of 2004, Monitronics saw a net loss of $600,000.

For the six-month period ending on Dec. 31, 2004, the company saw a net loss of $1.4 million, despite increased revenues of $8.6 million over the same period from the year before.

In a prepared statement, Monitronics CEO James Hull, indicated that despite losses, the security market was still a good field in which to be involved.

"Monitronics perceives the residential security market at this point to be stable and growing," said Hull. "Further, the company is well positioned to take advantage of the market."

In his statement, Hull added that Monitronics saw an increase in subscriber attrition, with a 12.7 percent rate for 2004, up from an 11 percent attrition rate in 2003. Hull credited the increase in attrition to a Monitronics policy change.

"This increase primarily reflects a slight change in policy made by us in June 2004 whereby subscribers in their annual renewal period may cancel with proper 30-days written notice," said Hull. "This change created a small number of accounts cancelled ahead of schedule."

Hull said that despite the increase in attrition, by allowing dissatisfied customers out of their contracts, the overall level of customer satisfaction can be increased. He added that the policy, though causing an early rise in attrition, should reduce the company's attrition rate "in the long term."